Gold prices climbed on Friday, supported by a weaker dollar and lower U.S. Treasury yields. However, the precious metal remained on course for a second straight weekly decline as rising energy prices reduced expectations for near-term interest rate cuts in the United States.
Spot gold rose 0.8% to $5,118.75 per ounce as of 0234 GMT, while U.S. gold futures for April delivery were little changed at $5,123.30.
According to Tim Waterer, chief market analyst at KCM Trade, the dollar’s retreat from recent highs has provided room for gold to advance amid ongoing geopolitical tensions.
Despite the daily gain, bullion has slipped about 1% so far this week.
Waterer noted that concerns over inflation and uncertainty about the Federal Reserve’s ability to cut interest rates—particularly if elevated oil prices persist—are offsetting some of gold’s safe-haven appeal.
The U.S. dollar edged lower on Friday, making commodities priced in the currency, including gold, cheaper for buyers using other currencies.
Meanwhile, yields on the benchmark 10-year U.S. Treasury note eased, boosting the attractiveness of non-yielding assets such as gold.
Geopolitical tensions also intensified after Iran’s Supreme Leader Mojtaba Khamenei said Tehran would keep the strategic Strait of Hormuz closed as leverage against the United States and Israel. The statement heightened concerns over global energy supplies and risk assets.
Oil prices climbed above $100 per barrel amid attacks on oil tankers in the Gulf and warnings from Iran, dampening hopes of a swift easing of tensions in the Middle East.
As crude prices surged, U.S. President Donald Trump again urged Federal Reserve Chair Jerome Powell to lower interest rates.
Market participants currently expect the Fed to maintain its benchmark rate within the 3.5%–3.75% range at the end of its two-day policy meeting on March 18, according to CME Group’s FedWatch tool.
Although recent data suggest inflation has been moderating, the impact of the conflict with Iran and the associated rise in oil prices has yet to be reflected in economic figures.
Investors are now looking ahead to the release of the delayed January Personal Consumption Expenditures index later in the day.
In other precious metals, spot silver rose 1.4% to $84.96 per ounce, platinum gained 0.9% to $2,151.97, and palladium advanced 1.4% to $1,640.64.
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